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  • FIRST POST
    • JustAnotherSaver
    • By JustAnotherSaver 15th May 19, 10:44 AM
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    JustAnotherSaver
    Is 'Vanguard LifeStrategy' enough in your portfolio?
    • #1
    • 15th May 19, 10:44 AM
    Is 'Vanguard LifeStrategy' enough in your portfolio? 15th May 19 at 10:44 AM
    Some of you may remember me as the clueless investor. Others may have joined since i last posted about retirement so if you haven't seen me around before then hi i'm the clueless investor In that i don't pretend to know a lot about this & jargon makes my eyes glaze over.


    On that note - i set up a SIPP with Cavendish a year or two ago, opted for one of the LifeStrategy funds as a subscribe-&-forget policy & then with everything else going on in life my reading on retirement went on the back burner for a good while. I opted for a subscribe-&-forget approach because i simply A) don't know enough and B) am not confident enough to go shuffling/rebalancing my portfolio, so until that time....


    NOTE: I know i mention LifeStrategy but really this question could apply to any fund-of-fund that's similar. I just named LifeStrategy as it appears to be the 'biggie' that everyone mentions.



    Anyway so i was reading a little recently regards returns on investments & this piece said about how LifeStrategy funds are fairly solid but they're nowhere near market leading (not that i thought they would be).
    It mentioned/suggested adding in some managed funds which from what i've previously read historically does not to as well as passive investing/index tracking over the long term (& therefore for someone who is looking at a 30+ year timeframe, i wondered why you'd want to do that).


    Now obviously everyone wants to buy the gold fund that is the lowest of the low and sell at the point when it's at the highest high, but nobody has a crystal ball. Likewise i understand that nobody can really say - yes LifeStrategy (or similar) WILL (or WONT) build you a huge pension pot that you can retire comfortably on as there's so many variables.


    But for anyone who's still kept with this post, in your own personal opinion, would you be happy to have one of these funds (or similar - not necessarily Vanguard's) as the solitary investment in your portfolio?






    Also to save me creating a separate thread on it - at what point would you consider an IFA (if you'd consider one at all)?
    I first started at 28 with £100pm. Nothing really but it was all i could afford at the time. I went with an IFA and after asking & reading on this forum i learned that any gains i make would likely be eroded by fees. Essentially it was a bad decision & i should 'have a go' myself while the pot is a small amount & only when it gets much larger should i consider an IFA.
    So how big would your pot have to be to consider one?

Page 4
    • Mordko
    • By Mordko 18th May 19, 1:36 PM
    • 290 Posts
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    Mordko
    Gee... I see you have a problem with facts AND Vanguard. “Non-profit” isn’t spin. “Non-profit” means the company can’t make profit.

    P.S. in the Vanguards case the company is owned by mutual fund investors and any profit is returned to these funds and their owners.
    Last edited by Mordko; 18-05-2019 at 1:45 PM.
    • Mordko
    • By Mordko 18th May 19, 1:43 PM
    • 290 Posts
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    Mordko
    John Bogle was worth $80M at the time of his death last year. The Chairman of Fidelity is worth multiple billions. Blackrock’s net after tax income was over 4 billion in 2018. Vanguard’s was zero after returning profit to the mutual fund shareholders who own Vanguard. I know, I know... Another one of Bogle’s marketing spins.
    • Prism
    • By Prism 18th May 19, 2:15 PM
    • 958 Posts
    • 728 Thanks
    Prism
    Sorry; I had assumed you were not sufficiently interested in your family’s future prosperity to invest time into educating yourself. I was wrong and I apologise.
    Originally posted by Mordko
    But you don't need to educate yourself. Thats what an IFA is for
    • OldMusicGuy
    • By OldMusicGuy 18th May 19, 3:12 PM
    • 998 Posts
    • 2,118 Thanks
    OldMusicGuy
    A question to old hats on this forum - is there a recommended literature list and a wiki for people starting to familiarize themselves with investments and pensions? Something like this?
    ]
    Originally posted by Mordko
    I always recommend "DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning" and "DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing" by John Edwards and "Investing Demystified" by Lars Kroijer. Reading the Monevator website is also of use.

    Tim Hale's "Smarter Investing" is also popular although I haven;t read that one.
    • enthusiasticsaver
    • By enthusiasticsaver 18th May 19, 4:40 PM
    • 8,736 Posts
    • 20,260 Thanks
    enthusiasticsaver
    Some of you may remember me as the clueless investor. Others may have joined since i last posted about retirement so if you haven't seen me around before then hi i'm the clueless investor In that i don't pretend to know a lot about this & jargon makes my eyes glaze over.


    But for anyone who's still kept with this post, in your own personal opinion, would you be happy to have one of these funds (or similar - not necessarily Vanguard's) as the solitary investment in your portfolio?






    Also to save me creating a separate thread on it - at what point would you consider an IFA (if you'd consider one at all)?
    I first started at 28 with £100pm. Nothing really but it was all i could afford at the time. I went with an IFA and after asking & reading on this forum i learned that any gains i make would likely be eroded by fees. Essentially it was a bad decision & i should 'have a go' myself while the pot is a small amount & only when it gets much larger should i consider an IFA.
    So how big would your pot have to be to consider one?
    Originally posted by JustAnotherSaver
    I only have one multi asset fund in my portfolio at the moment. Vanguard Lifestrategy 60 and my SIPP, ISA and husbands ISA are all in the same fund. I started investing in it about 5 years ago, older than you and initially it was a monthly amount then a few lump sums then transferring old cash isas across. I chose it because there was a lot of information about it especially on here, the multi asset nature appealed to me as it was essentially a broadly diversified fund less volatile than 100% equities and cheap. I don't have the knowledge to pick managed funds or suss out the good performers from the duds. I can understand the performance charts from trustnet or morning star but as far as I could see the Vanguard lifestrategy funds performed well but it looked like the managed ones sometimes did well but then languished and the charges seemed steep. I feel that I would have to keep more of an eye on managed investments whereas I feel confident to just invest and forget with the Vanguard LS60 and in all honesty that is what I would rather do. I don't have the will to spend a lot of time trying to work out where to invest in the thousands of funds there are out there.

    However our investments are now over £200k and all in Vanguard life strategy 60. We had a review with an IFA just before my DH retired two years ago and were not impressed. He did a review of our pensions and investments and made a fairly obvious mistake so I had no confidence in him after that. He based his whole report on false information given to him by my husbands company pension administrator (wrong retirement year quoted) and whilst they made the mistake he did not spot it or wonder why the calculations were so far off the figures we got 6 months earlier. Anyone who misses such a glaring error does not fill me with confidence so we carried on with me managing our investments as before and the pot was growing as we sold a property and then I retired. We are in the process of another review now with a different IFA so will see what he says.

    So the answer to your second question in my view is when the pot is over £100k or you no longer feel confident you are going down the right road. Our investments have grown since I started self investing but whether they would have grown more under an IFA after their charges I don't know. For us it is not too much of an issue as we are already early retired and comfortable financially with a mix of the Vanguard LS 60, DB pensions covering our living expenses, cash and a mortgage free property. Whether an IFA can add value to what we have already will depend on how we perceive the 2nd IFA's report.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • bostonerimus
    • By bostonerimus 18th May 19, 6:03 PM
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    bostonerimus
    So the answer to your second question in my view is when the pot is over £100k or you no longer feel confident you are going down the right road. Our investments have grown since I started self investing but whether they would have grown more under an IFA after their charges I don't know. For us it is not too much of an issue as we are already early retired and comfortable financially with a mix of the Vanguard LS 60, DB pensions covering our living expenses, cash and a mortgage free property. Whether an IFA can add value to what we have already will depend on how we perceive the 2nd IFA's report.
    You sound as if you have organized things well on your own. I’m not sure it’s worth paying someone 1% to do what you seem to be doing perfectly well yourself. People too often believe, or are told by the financial industry, that there is some special sauce. The “sauce” isn’t that special, just common sense and time as I think you have found our.
    Misanthrope in search of similar for mutual loathing
    • Thrugelmir
    • By Thrugelmir 18th May 19, 6:13 PM
    • 63,703 Posts
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    Thrugelmir
    John Bogle was worth $80M at the time of his death last year. The Chairman of Fidelity is worth multiple billions. Blackrock’s net after tax income was over 4 billion in 2018. Vanguard’s was zero after returning profit to the mutual fund shareholders who own Vanguard. I know, I know... Another one of Bogle’s marketing spins.
    Originally posted by Mordko
    How much do Vanguard's executive's and management team earn? The matter is clouded in secrecy. If as you say that operate for the benefit of their investors as a mutual organisation. Why the need.

    Equitable Life was a mutual organisation. Once the lid was lifted. Not all as it seemed.

    PS. Not suggesting that Vanguard is "bad". Just don't wear RTG's when dealing with US Corporate organisations.
    Last edited by Thrugelmir; 18-05-2019 at 6:17 PM.
    “The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett
    • Mordko
    • By Mordko 18th May 19, 9:19 PM
    • 290 Posts
    • 99 Thanks
    Mordko
    How much do Vanguard's executive's and management team earn? The matter is clouded in secrecy. If as you say that operate for the benefit of their investors as a mutual organisation. Why the need.

    Equitable Life was a mutual organisation. Once the lid was lifted. Not all as it seemed.

    PS. Not suggesting that Vanguard is "bad". Just don't wear RTG's when dealing with US Corporate organisations.
    Originally posted by Thrugelmir
    BlackRock, Fidelity and HSBC also have well compensated executives. They pay out shareholder dividends on top of that.

    Vanguard have been very consistent in driving the costs down for investors and offering innovative quality products over many years and providing an alternative to overpriced funds and expensive IFAs.

    Not to say that other providers don’t have competitively priced products. I own Vanguard ETFs as well as ETFs managed by BlackRock and a couple of other providers. Vanguard upends the market which forces others to offer competitive products.
    • bostonerimus
    • By bostonerimus 18th May 19, 9:45 PM
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    bostonerimus
    There are many ways to skin a financial cat. I use Vanguard in the USA because they don't charge for trades involving their own funds and as I only own low cost Vanguard funds on the Vanguard platform my total costs work out to be 0.06%. I also like their "mutual" structure.
    Misanthrope in search of similar for mutual loathing
    • Thrugelmir
    • By Thrugelmir 18th May 19, 11:31 PM
    • 63,703 Posts
    • 56,406 Thanks
    Thrugelmir
    Vanguard have been very consistent in driving the costs down for investors and offering innovative quality products over many years and providing an alternative to overpriced funds and expensive IFAs.
    Originally posted by Mordko
    Price isn't everything. There's room for both passive and active fund management in everyone's portfolio. Investing is a broad church. Not restricted to any one belief. Having a single belief is likely going to result in disappointment in the longer term.

    Likewise as Vanguards range of products widens. Who is going to advise investors the best option to choose. May work for the US markets. Where market analysis (paid for by others) results in efficient market pricing. Not so sure that investing in China, for example, on a passive basis is such a good idea. As is so very different for a whole variety of reasons.
    “The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett
    • bostonerimus
    • By bostonerimus 19th May 19, 2:09 AM
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    bostonerimus
    Price isn't everything. There's room for both passive and active fund management in everyone's portfolio. Investing is a broad church. Not restricted to any one belief. Having a single belief is likely going to result in disappointment in the longer term.
    Originally posted by Thrugelmir
    I haven't been disappointed, but then I think I have sensible expectations and never set out with the idea that I would get the highest possible returns. In the end I've settles for around a 30 year average annual return of 8.5% using index funds.
    Misanthrope in search of similar for mutual loathing
    • enthusiasticsaver
    • By enthusiasticsaver 19th May 19, 8:15 AM
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    • 20,260 Thanks
    enthusiasticsaver
    You sound as if you have organized things well on your own. I’m not sure it’s worth paying someone 1% to do what you seem to be doing perfectly well yourself. People too often believe, or are told by the financial industry, that there is some special sauce. The “sauce” isn’t that special, just common sense and time as I think you have found our.
    Originally posted by bostonerimus
    Believe me I have been to and fro on this. I have been told charges are not everything and sometimes other investments have outperformed the Vanguard lifestrategy funds even after the charges have been deducted and on a relatively large portfolio the setting up costs can be significant let alone 5 years of ongoing charges.

    To me the biggest argument for keeping things as they are is that we are invested according to our risk profile - I rarely panic if prices move or even check these days beyond the 6 monthly review date I set myself and we have more than sufficient income and capital to lead the sort of life we want to lead. Don't get me wrong it is always nice to have more but even the IFA was having difficulty justifying why we should engage him beyond saying he could add enough value for us to take another holiday each year even after charges. To my mind I am not sure how he can say that but we have not yet seen the report as he says our pensions situation is more complex than he thought so I am fully expecting the £250 review charge to be higher should we not invest with him. He has also taken longer than he first said so my guess is he cannot demonstrate conclusively why we should sign with him.

    I think my difficulty is as the OP says when the pot was small I was fine with doing it myself but now it is much larger a couple of extra percent on performance each year could add £5k to the overall investment pot each year and I don't have the tax expertise to decide on the best way to manage the SIPP and remaining DC pot for my DH who shows no wish to manage his own financial affairs and says he will just go along with what I want to do. Helpful not.

    My base line really up until now has been the same as you and I will settle for average returns rather than chasing better percentages on a temporary basis. Slow and steady has always been my mantra. Not exciting but reliable.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • andy001
    • By andy001 19th May 19, 9:20 AM
    • 93 Posts
    • 53 Thanks
    andy001
    Nice thread, Some great answers...

    What should OP add to his vanguard 60 portfolio to diversify?
    I'm not a Financial advisor.
    Please seek independent financial advice.
    • dunstonh
    • By dunstonh 19th May 19, 10:04 AM
    • 98,597 Posts
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    dunstonh
    Nice thread, Some great answers...

    What should OP add to his vanguard 60 portfolio to diversify?
    Originally posted by andy001
    Nothing.

    It is a multi-asset fund. It is diversified and follows a structure. If the OP believes they are a better investor than Vanguard then they wouldn't need to ask the question.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • JustAnotherSaver
    • By JustAnotherSaver 19th May 19, 10:15 AM
    • 3,833 Posts
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    JustAnotherSaver
    my DH who shows no wish to manage his own financial affairs and says he will just go along with what I want to do. Helpful not.
    Originally posted by enthusiasticsaver
    I don't know what DH stands for but in the context i'm getting that it's basically your other half.

    In which case i am in exactly the same boat as you.


    I help/manage the finances of my wife, my siblings & my mother. This came about basically by me telling them just leaving everything in 1 bank account & 'staying loyal' to a bank wasn't doing them any good. Their response was could you do it for us. As i love to be able to help i said no problem.

    They have no desire to learn these things because they have no interest in it. I know the response on here would be 1) yeah but i bet they're happy to pick up the interest though (yes, of course they are, who wouldn't be) 2) show them how to do it themselves (like i just said they have no interest to do that) 3) well just don't do it and let them deal with it themselves (like i said, i get enjoyment out of helping others when i can).
    There's also other reasons for helping too. My wife - we're a team at the end of the day. My financial situation impacts hers as does hers mine. It's in both our interests for us to be at our best. My brother & sister - i don't want to see them making the mistakes i did & starting late in life. My mother - had my dad do everything for her as far as the money went & now he's no longer here she's on her own.


    Slow and steady has always been my mantra. Not exciting but reliable.
    Exactly. So long as i can be on track to retire at a decent age and be comfortable in retirement then i'm good. I don't really want to be working in to my 70s. I don't factor in the workplace pension in any calculations because my contributions to that are minimal (about £75-£80pm) and i treat it as a bonus to what i see as my pension - my SIPP.


    Nice thread, Some great answers...

    What should OP add to his vanguard 60 portfolio to diversify?
    Originally posted by andy001
    I'm wondering if you've confused me with someone?

    • JustAnotherSaver
    • By JustAnotherSaver 19th May 19, 10:20 AM
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    JustAnotherSaver
    Nothing.

    It is a multi-asset fund. It is diversified and follows a structure. If the OP believes they are a better investor than Vanguard then they wouldn't need to ask the question.
    Originally posted by dunstonh
    While i agree with your comment of nothing, the reason is a little different - on account of i don't actually hold VLS60, so can't add anything to a fund i don't own.


    However even someone as clueless as me has spotted comments on this very message board about areas that VLS lack in, that it's not a perfect fund, so i understand the guy asking (for whoever he saw that owns VLS60). I don't know what area/s they lack in but i've certainly seen numerous comments over the past year or 2 i've been looking at investing where people are talking about additional funds to compliment VLS in areas they lack.

    • dunstonh
    • By dunstonh 19th May 19, 10:27 AM
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    • 67,014 Thanks
    dunstonh
    While i agree with your comment of nothing, the reason is a little different - on account of i don't actually hold VLS60, so can't add anything to a fund i don't own.


    However even someone as clueless as me has spotted comments on this very message board about areas that VLS lack in, that it's not a perfect fund, so i understand the guy asking (for whoever he saw that owns VLS60). I don't know what area/s they lack in but i've certainly seen numerous comments over the past year or 2 i've been looking at investing where people are talking about additional funds to compliment VLS in areas they lack.
    Originally posted by JustAnotherSaver
    Core and satellite is a valid approach to investing but it needs structure and understanding.

    If you don't think VLS60 is the best fund for your risk level (and it isnt at the moment) and you dont like how it invests then there are other multi-asset funds. If none of those fit what you want then you either build a portfolio of single sector funds (more advanced option) or you use a core and satellite approach.

    For those that want an invest and forget / lazy investor style approach, core and satellite is not a good approach. Nor is a portfolio of single sector funds. Sticking with the single multi-asset fund would be.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • ColdIron
    • By ColdIron 19th May 19, 10:56 AM
    • 5,317 Posts
    • 7,283 Thanks
    ColdIron
    What should OP add to his vanguard 60 portfolio to diversify?
    Originally posted by andy001
    Lifestrategy is already a very diverse fund. There is all sorts of stuff you could add to it that would likely reduce its long term performance. Diversification for diversification's sake is not always a worthy goal
    • bostonerimus
    • By bostonerimus 19th May 19, 3:49 PM
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    bostonerimus
    Believe me I have been to and fro on this. I have been told charges are not everything and sometimes other investments have outperformed the Vanguard lifestrategy funds even after the charges have been deducted and on a relatively large portfolio the setting up costs can be significant let alone 5 years of ongoing charges.
    Originally posted by enthusiasticsaver
    There is always a temptation to "maximise returns" or "optimise" a portfolio. I'd start by asking yourself if you currently have a portfolio that meets your needs. Does the risk/return of your investments serve the function of providing you with retirement income and is it part of a robust income plan that can survive some bad times. If it is, then why change anything?

    It is true that many portfolios will outperform VLS and also that many will do worse. If you had the management of your money over to an advisor you will certainly be charged a fee, but whether you end up ahead of DIY is uncertain... and if that fee is 1% that will be about a quarter of a sensible annual withdrawal from your investments.

    I'm in a similar situation to you with income from a DB pension and other DC and regular investments. I DIY and have most of it in a few low cost Vanguard funds. It's simple and ticks along at around 8.5% a year on average. I don't mind about down years as I have a DB pension to rely on. I will largely miss out of the highs of China and emerging markets etc, but I will also miss the lows.
    Misanthrope in search of similar for mutual loathing
    • enthusiasticsaver
    • By enthusiasticsaver 19th May 19, 4:11 PM
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    enthusiasticsaver
    There is always a temptation to "maximise returns" or "optimise" a portfolio. I'd start by asking yourself if you currently have a portfolio that meets your needs. Does the risk/return of your investments serve the function of providing you with retirement income and is it part of a robust income plan that can survive some bad times. If it is, then why change anything?

    It is true that many portfolios will outperform VLS and also that many will do worse. If you had the management of your money over to an advisor you will certainly be charged a fee, but whether you end up ahead of DIY is uncertain... and if that fee is 1% that will be about a quarter of a sensible annual withdrawal from your investments.

    I'm in a similar situation to you with income from a DB pension and other DC and regular investments. I DIY and have most of it in a few low cost Vanguard funds. It's simple and ticks along at around 8.5% a year on average. I don't mind about down years as I have a DB pension to rely on. I will largely miss out of the highs of China and emerging markets etc, but I will also miss the lows.
    Originally posted by bostonerimus
    I agree whole heartedly with this and we are in a similar position to you with DB pensions covering the majority if not all of our living expenses so we can afford to be a little complacent with our investments and hold a little too much in cash. The investments tick along and I don't need to worry too much about them. The IFA we are seeing at the moment is a financial life planner. He tells us essentially how much we can spend annually and where from or if we will run out of money and has obviously more extensive investment and tax knowledge. He is not cheap though.

    He says our affairs are too complicated and he can help simplify it but I would not necessarily agree with that but as I say we have yet to see his recommendations. We have one DB pension each paying out at the moment and one further one due to kick in early next year for me. I have a SIPP and DH has a DC pot with links to his DB pension due to AVCs and protected rights. We both have a stocks and shares ISA each invested wholly into Vanguard LS60 as is my SIPP. My DHs DC pot is invested in his old company occupational scheme and is already crystallised as his TFLS came from there. We have an interest bearing current account and an internet saver for our cash. Both of us will have full state pensions within the next seven years. Is that unnecessarily complicated?
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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